Snags

Texas Eastern Products Pipeline Co. LLC, the general partner of TEPPCO Partners LP, made its largest purchase ever last Tuesday, paying $444 million for Burlington Resources’ 1 Bcf/d Val Verde gathering system in the San Juan Basin. TEPPCO officials said they expect the addition of the system to be immediately accretive to earnings and cash flow and to show moderate annual growth going forward.

A consortium of producers led by Statoil ASA signed an agreement last week with a subsidiary of Houston-based El Paso Corp. to sell 1.8 million tons of liquefied natural gas (LNG) annually for 17-to-20 years — an agreement that will supply El Paso with LNG for storage at Williams’ Cove Point LNG terminal in Lusby, MD, as well as “other North American and European destinations” where it will be regasified and sold as natural gas. El Paso has leased capacity from Williams at Cove Point to deliver about 250 MMcf/d into the East Coast pipeline infrastructure.

A consortium of producers led by Statoil ASA has signed an agreement with a subsidiary of Houston-based El Paso Corp. to sell 1.8 million tons of liquefied natural gas (LNG) annually for 17-to-20 years — an agreement that will supply El Paso with LNG for storage at Williams’ Cove Point LNG terminal in Lusby, MD, as well as “other North American and European destinations” where it will be regasified and sold as natural gas. El Paso has leased capacity from Williams at Cove Point to deliver about 250 MMcf/d into the East Coast pipeline infrastructure.

There’s good news and then there’s better news. For Houston-based Kinder Morgan Inc. (KMI), every day just seems to be a front-page top-of-the-fold story. Take Wednesday, for instance. Delivering on projections made earlier this month that it would meet or beat consensus earnings estimates, KMI reported great news, with a 107% boost in second quarter earnings over the same period a year ago, and year-to-date earnings up 42%. However, KMI’s general limited partner Kinder Morgan Energy Partners L.P. (KMP) almost trumped the broadcast, with its announcement that it would buy a 2,600-mile Texas natural gas pipeline system for $360 million and split its stock two for one.

El Paso Corp. gained a foothold in western Canada yesterday with the purchase of Canadian independent Velvet Exploration Ltd. for C$8.15/share or about US$280 million, including the assumption of US$52 million in debt. Velvet holds about 172 Bcf of net proved reserves (59% gas) in the Western Canadian Sedimentary Basin and 403,000 acres of undeveloped land. El Paso said the total acquisition cost per proved thousand cubic feet equivalent (Mcfe) is US$1.16, after allocating value to Velvet’s land, seismic position and tax pools.

El Paso Corp. gained a foothold in western Canada last week with the purchase of Canadian independent Velvet Exploration Ltd. for C$8.15/share or about US$280 million, including the assumption of US$52 million in debt. Velvet holds about 172 Bcf of net proved reserves (59% gas) in the Western Canadian Sedimentary Basin and 403,000 acres of undeveloped land. El Paso said the total acquisition cost per proved thousand cubic feet equivalent (Mcfe) is US$1.16, after allocating value to Velvet’s land, seismic position and tax pools.

In what would be the smallest of the four existing liquefiednatural gas terminals in the United States, El Paso Merchant Energygot the go-ahead on a three-year lease option to build a facilityon Radio Island in North Carolina. The North Carolina State PortsAuthority unanimously approved the deal last week.

In what would be the smallest of the four existing liquefied natural gas terminals in the United States, El Paso Merchant Energy got the go-ahead on a three-year lease option to build a facility on Radio Island in North Carolina. The North Carolina State Ports Authority unanimously approved the deal last week.

International power producer AES Corp. announced a plan to scarfup the assets of Thermo Ecotek Corp., a subsidiary of ThermoElectron Corp. of Waltham, MA, for $195 million in cash, plusadditional closing adjustments that currently amount to another $15million. Thermo Ecotek builds and operates power plants and ownsgas storage assets. Its portfolio includes 516 MW of gas-fired,biomass-fired (agricultural and wood waste), and coal-fired powerplants in the United States, the Czech Republic, and Germany, aswell as a natural gas storage project in the United State and over1,250 MW of advanced development power projects in the UnitedStates. The transaction is likely close during the third quarter.